Pleasanton Weekly

Builder confidence in 55+ housing market at record high

by Jeb Bing

Builder confidence in the 55-and-older housing market was up sharply for the fourth quarter of 2013, according to the latest National Association of Home Builders (NAHB) 55+ Housing Market Index, released last week.

All segments of the market -- single-family homes, condominiums and multifamily rentals -- registered strong increases compared to the same quarter a year ago. The single-family index increased 20 points to a level of 48, which is the highest fourth-quarter reading since the inception of the index in 2008 and the ninth consecutive quarter of year-over-year improvements.

"We are seeing continued improvement in the 55+ housing market because consumers have gained confidence in the economy and are able to sell their current homes and move into a new home or an apartment that fits the lifestyle they desire," said Robert Karen, chairman of NAHB's 50+ Housing Council and managing member of the Symphony Development Group. "We expect this optimism from builders and developers to carry on into 2014."

There are separate 55+ indices for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each index measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than as good.

All of the components of the 55+ single-family index showed significant growth from a year ago: present sales climbed 26 points to 53, expected sales for the next six months rose 24 points to 62 and traffic of prospective buyers increased 9 points to 33.

The 55+ multifamily condo index posted a gain of 16 points to 35, which is the highest fourth-quarter reading since the inception of the index.

All 55+ multifamily condo index components increased compared to a year ago. Present sales increased 20 points to 37, expected sales for the next six months increased 15 points to 40 and traffic of prospective buyers increased 9 points to 30.

"The 55+ segment of the housing market contains more discretionary purchases, so as expected it has taken longer for that segment to join the housing recovery," said NAHB Chief Economist David Crowe. "The 20 point year-over-year increase in 55+ for single-family homes matches earlier gains in the NAHB/Wells Fargo index for the overall single-family market and surpasses the more recent gains in the other housing segments."

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